The Directorate of Income-tax (System) has issued a directive dated 20.02.2019 on the subject of processing of Return of AY 2017-18 and issue of notice for prima facie adjustment under 143(1)(a).

It is pointed out that with effect from AY 2017-18 amendments have been done in the Act with regard to processing of cases under 143(1). Provision of section 143(1D) has been amended, as per which all the returns are required to be processed. Section 241A allowing withholding of refund determined under 143(1) in cases where notice u/s 143(2) is issued is also introduced.

It is further stated that provision of 143(1)(a) was amended w.e.f 01.04.2017 as per which certain adjustments on income of loss submitted by assessee in ITR are allowed. As per the proviso to the section, no such adjustment is allowed unless notice for such adjustment is given to the assessee. The assessee is allowed to submit response within a period of 30 days of issue of notice.

The AO CPC sending notices u/s 143(1a) of the I.T. Act,for disallowance ESI &PF on late deposition of employees contribution u/s 36 r.w.s. 2(24)(x) although delay of one or two days which are covered by extended period of 5 days. Whereas judicial pronouncements on this issue allow the claim u/s 43B of the I.T. Act, 1961. These types issue should be out of adjustment.

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